SoftBank sinks 8% as Japanese chip stocks track Wall Street AI sell-off

Japanese technology stocks faced a significant decline on Friday as a new wave of losses in U.S. semiconductor shares rippled across Asia, highlighting increasing anxieties surrounding artificial intelligence spending. SoftBank saw its shares drop by 8.8%, while Tokyo Electron, a chip equipment manufacturer, fell by 9%. Advantest experienced a similar fate, losing 9.4%, as they mirrored the steep losses seen on Wall Street overnight. Adding to the turmoil, Kioxia, a Japanese memory chipmaker, plummeted over 14% after a federal jury in Texas mandated that the company pay $229 million in damages for infringing on a Viasat patent related to computer memory technology. Meanwhile, South Korea's markets remained closed due to a public holiday, but SK Hynix shares had already closed down over 11% the previous day. The downward trend followed another challenging session for U.S. tech stocks, with the Nasdaq Composite index falling by 1.47% as semiconductor shares faced renewed pressure. The VanEck Semiconductor ETF dropped nearly 4%, and Arm Holdings fell by more than 5%. Major companies like Micron Technology, Advanced Micro Devices, and Broadcom also saw losses exceeding 5%, while U.S.-listed shares of SK Hynix slipped over 13%. Despite TSMC raising its full-year capital expenditure forecast to between $60 billion and $64 billion, investors remained skeptical. They focused on concerns that the industry's aggressive investment cycle might be increasingly unjustifiable. Andrew Jackson, a strategist at Ortus Advisors, noted, "Another wipe out for U.S. tech and AI, with recent momentum winners taking a hit after TSMC's earnings were not deemed strong enough to support further gains, raising questions over excessive spending." This sell-off signifies a notable reversal in global AI-related shares, which had experienced remarkable gains over the past months. Investors are now questioning whether the high valuations can be maintained as spending on AI infrastructure continues to rise.